AI's Impact on Labor and Hiring
B · Useful, limited Thematic post by the New York Fed's research director that recaps the bank's own business and consumer surveys; credible institutional context with no new data or analysis of its own.
Summary based on the full text·Original: about 6 minutes to read
In short
The first post (5 August 2026) in "Street Level", a series by Kartik Athreya, research director at the Federal Reserve Bank of New York, that summarises the bank's research on a theme. The theme here is AI and hiring. His reading of the bank's surveys: adoption is rising fast, AI-driven layoffs are rare, and the effect so far shows up in changed skill requirements and slower hiring plans, especially for graduates. He closes with two risks of his own: narrow specialisation leaves workers exposed to a sudden fall in the value of their one skill, and AI may tilt demand toward status-driven, zero-sum consumption.
Key numbers
- 25 to 40percent of New York-region service firms using AI, 2024 to 2025 (44 expected in the next six months)
- 16 to 26percent of New York-region manufacturers using AI, 2024 to 2025 (33 expected in the next six months)
As reported by the source.
English·Web page·opens libertystreeteconomics.newyorkfed.org
What it reports
- New York Fed regional business surveys (August 2025): AI use rose from 25% to 40% of service firms and from 16% to 26% of manufacturers between 2024 and 2025, with 44% and 33% expected within six months.
- Firms report very few AI-driven layoffs; they expect to reduce hiring plans, especially for college-educated workers.
- Some firms hire less because AI automates tasks; others hire more AI-proficient workers.
- Firms overwhelmingly say they intend to retrain rather than dismiss staff as they adopt AI.
- An October 2024 New York Fed analysis found that people exposed to generative AI tools held bleaker expectations for job availability and income inequality.
- Cites Garicano and coauthors on jobs as bundles of tasks, where automating some tasks frees teams for others.
How they got it
A synthesis of earlier New York Fed survey posts (regional business surveys, Survey of Consumer Expectations) and outside papers, plus the author's own commentary. No new data or method is introduced.
Limits
- Survey results are self-reported intentions of firms in one Federal Reserve district.
- The retraining chart is described but its values are not given in the text.
- The demand-side argument about status consumption is explicitly speculative.
- Views are the author's, not the Federal Reserve's.
Why it matters for companies
The useful message for workforce planning is where the effect lands first: hiring plans and skill mix, not layoffs. If firms in the survey are right, entry-level and graduate intake is the exposed margin, and stated retraining intentions will need budget to become real. The specialisation point is also practical: roles built around one narrow task are the ones whose value can drop fastest, which argues for broadening job designs before AI does it for you.
Summary based on the full text. Read the original for the full argument and data.Read the original on libertystreeteconomics.newyorkfed.org
- Tags
- Labour market, Hiring